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Labour Market Policies in Times of Crisis: A Comparison of the 1992-1993 and 2008-2010 Recessions

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Abstract

This article examines the reaction function of labour market expenditure to the economic cycle and especially to the labour market situation in 24 OECD countries, over the period 1985 to 2010. The level of public debt is also introduced as a potential determinant of labour market policy expenditures. Using a fixed effect model with interacting terms, it focuses on two periods of crisis (1992-1993 and 2007-2009). The results indicate that the level of reactivity of labour market expenditure did in general decrease between the early 1990s and the 2008 downturn. This could result from important reforms in this field, over the last 20 years.

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File URL: ftp://mse.univ-paris1.fr/pub/mse/CES2013/13060.pdf
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Paper provided by Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne in its series Documents de travail du Centre d'Economie de la Sorbonne with number 13060.

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Length: 28 pages
Date of creation: Sep 2013
Date of revision:
Handle: RePEc:mse:cesdoc:13060

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Keywords: Labour market policies; international comparisons; crisis.;

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  1. Ohlsson, H., 1990. "Job Creation Measures As Activist Fiscal Policy: An Empirical Analysis Of Policy Reaction Behavior," Papers 1990d, Uppsala - Working Paper Series.
  2. David R. Howell & Bert M. Azizoglu, 2011. "Unemployment benefits and work incentives: the US labour market in the Great Recession," Oxford Review of Economic Policy, Oxford University Press, vol. 27(2), pages 221-240.
  3. Dominique ANXO & Harald NIKLASSON, 2006. "The Swedish model in turbulent times: Decline or renaissance?," International Labour Review, International Labour Organization, vol. 145(4), pages 339-371, December.
  4. Karl Aiginger & Thomas Horvath & Helmut Mahringer, . "Why Labour Market Response Differed in the Great Recession: The Impact of Institutions and Policy," WIFO Working Papers 396, WIFO.
  5. John Grahl & Paul Teague, 2013. "Reconstructing the eurozone: the role of EU social policy," Cambridge Journal of Economics, Oxford University Press, vol. 37(3), pages 677-692.
  6. Eamets, Raul, 2013. "Labour Market and Labour Market Policies During the Great Recession: The Case of Estonia," IZA Policy Papers 60, Institute for the Study of Labor (IZA).
  7. Maddala, G S & Wu, Shaowen, 1999. " A Comparative Study of Unit Root Tests with Panel Data and a New Simple Test," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 61(0), pages 631-52, Special I.
  8. Cazes, Sandrine, 2009. "Labour market policies in times of crisis," ILO Working Papers 434163, International Labour Organization.
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